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October 20, 2006
Survey Shows Employers Not Calculating ROI for Employee Wellness Programs

Costly healthcare premiums have prompted some employers to offer programs that encourage healthier lifestyles. From lunchtime discussions on health-related topics to on-site fitness centers, wellness programs vary based on a company's resources and employee interest.

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The problem is, many employers don't take the time to measure the effectiveness of those programs, says Bill Kenney, co-owner of Positive Changes (, a behavior modification center located in West Hartford, Connecticut.

In a recent survey of 300 companies with at least 100 employees in the metro-Hartford area, Positive Changes found that 57 percent of employers offer some kind of wellness program. However, only about 25 percent of those employers measure return on investment (ROI) associated with their program, according to Kenney.

Programs Target High Premiums

Many companies start a wellness program in an effort to lower their insurance premiums, he says, noting that over the last few years healthcare premiums have risen between 15 percent and "a fairly staggering" 50 percent annually. "It's just a front-and-center issue. It's really beginning to impact some companies' bottom line."

Other reasons cited for offering a wellness program include a desire to increase productivity, reduce absenteeism, and improve the overall health of employees, says Kenney.

However, few participants in the Positive Changes survey could say whether their programs were achieving the desired results because most have no mechanism in place to measure the effectiveness of their programs, according to Kenney.

"When we buy a new car, the first thing we want to know is how many miles per gallon of gas we will get," he says. Yet, in the workplace, "often, we put things in place that we don't try to measure."

For HR, that can be particularly problematic when trying to justify a budget. "The safest way to protect your budget is to prove your worth," Kenney says.

Lay a Foundation, And Build on It

Opening a fitness center is not the only way to promote employee wellness. In fact, there are many other approaches that might be more appropriate given the demographics of your workforce and your resources.

Some companies start with "brown bag lunches" where employees bring their own food for a noontime discussion of a health-related topic, says Kenney.

Others sponsor health fairs once or twice a year to promote employees' financial, physical, and mental health, Kenney says.

While some companies organize health fairs internally, others rely on a private vendor or their insurance company to manage such events.

Some companies sponsor weight-loss or smoking cessation programs on-site or reimburse employees when they successfully fulfill the requirements of such a program, Kenney explains.

He recommends reimbursement over paying costs upfront because the promise of reimbursement will encourage employees to complete the program requirements.

Whatever approach you decide to pursue, Kenney recommends identifying a specific, measurable goal and then actually measuring whether that goal has been achieved.

"Have a clear objective in mind," such as reducing healthcare costs or increasing productivity, Kenney says. Then, "measure it. Monitor it. Make sure it achieves the results you want."

It's important to be willing to modify the program as needed, Kenny concludes.

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